With this much-better-than-expected news, the benchmark bond is getting a proverbial butt-whooping, right? Did you look ahead at the pretty chart? If you did, you would see that the bond is down, but only by 3 basis points at the time I took the snapshot of the chart. I think traders are looking for bigger news (or they are all on vacation) to commit one way or the other. Over the last five days the FNMA benchmark bond is trading in a very narrow range of 45 basis points. Here's the chart (that you probably already looked at):
If you look at the bottom right corner you will notice that the last five days of trading is not very volatile which is why the range is so narrow. The one thing that has changed is that the RSI is now very close to oversold even though the benchmark bond is only 79 basis points above the recent low of 10 days ago. Here's a look at the RSI:
If you or a client has a loan closing 15+ days out, I would probably float (DISCLAIMER: keep a close eye on the bond market so that you can be ready to lock quickly if the market moves against you). The benchmark bond is also currently trading about in the middle of the resistance and support levels and with the good data this morning, I would expect that if it made a move, it would be down toward the support. That said, traders seem to be waiting for something bigger. Rates are great so locking now isn't a bad thing. Feel free to contact me if I can help in any way - 702-812-1214. Make it a great day.